Volume 3, Issue 3, June 2015, Page: 204-212
Critical Analysis of the Factors Affecting the Dividend Payout: Evidence from Pakistan
Saghir Ahmed, Department of Management Sciences, National University of Modern Languages, Islamabad, Pakistan
Hasan Murtaza, Business School, University of Lahore, Islamabad Campus, Pakistan
Received: Mar. 28, 2015;       Accepted: Apr. 10, 2015;       Published: Apr. 27, 2015
DOI: 10.11648/j.ijefm.20150303.17      View  6653      Downloads  382
Abstract
The research was conducted to highlight the determinants of dividend payout and to analyse the effect of change in dividends over the future company growth in Pakistan. Firm size, liquidity, profitability, leverage, and earnings per share were used as independent variable while dividend payout ratio was taken as dependent variable. Prolonging this relationship further, dividend payout ratio was taken as independent variable and company growth as dependent variable to examine the impact of dividend payout ratio on future company growth. Descriptive statistics and pooled least square method were used. E-views was used to process the secondary data from 2003-2011 related to 38 selected companies from four different sectors. Results show that there is a significant relationship among liquidity, earning per share, leverage, firm size and dividend payout ratio in all four selected sectors: Oil, Cement, Energy, and Sugar. It is also found that there is significant relationship between dividend payout ratio and future company growth.
Keywords
Dividend Payout, Pooled Least Square Regression, Pakistan
To cite this article
Saghir Ahmed, Hasan Murtaza, Critical Analysis of the Factors Affecting the Dividend Payout: Evidence from Pakistan, International Journal of Economics, Finance and Management Sciences. Vol. 3, No. 3, 2015, pp. 204-212. doi: 10.11648/j.ijefm.20150303.17
Reference
[1]
Abor, J. & Fiador, V. (2013). "Does corporate governance explain dividend policy in Sub‐Saharan Africa?” International Journal of Law and Management, Vol. 55, Pp.201 - 225
[2]
Abor, J., & Bopkin, G. A. (2010). Investment opportunities, corporate finance, and dividend payout policy: Evidence from emerging markets. Studies in Economics & Finance, Vol. 27, Pp. 180-194.
[3]
Al‐Yahyaee, K. H., Pham, T., & Walter, T., (2010) "Dividend stability in a unique environment", Managerial Finance, Vol. 36, Pp.903 - 916
[4]
Al- Najjar B. (2009), “Dividend Behavior and Smoothing: New Evidence from Jordanian Panel Data”, Studies in Economics and Finance, Vol. 26, No. 3, Pp.: 182-197.
[5]
Ahmed, H., & Javid, A., Y., (2009), Dynamics and determinants of dividend policy in Pakistan‘, "International research journal of finance and economics", Vol.28, Pp. 56–61
[6]
Aivazian, V., Booth, l., & Cleary, S., (2003), Do emerging market firms follow different dividend Policies from us firms?, "Journal of financial research", Vol. 26, No. 3, Pp. 371-87.
[7]
Amidu, M., & Abor, J., (2006). Determinants of dividend payout ratios in Ghana, "The journal of risk finance", Vol. 7, No. 2, Pp. 136-145, Doi 10.1108/15265940610648580
[8]
Desai, M. A., Foley, C. F., & Hines Jr., J. R., (2001), Repatriation taxes and dividend distortions. National Tax Journal, Vol. 54, Pp. 829-851.
[9]
Eriotis, N., (2005). The effect of distributed earnings and size of the firm to its dividend policy, International Business and Economics Journal, Vol. 4, Pp.: 67-74
[10]
Essa, M.S., et al, (2012), A worthy factors affecting dividends policy decisions, An empirical study on industrial corporations listed in Amman stock exchange, "Interdisciplinary journal of contemporary research in business", Vol. 4, No 5
[11]
Hafeez, A. & Attiya Y., (2008).Dynamics and determinants of dividend policy in Pakistan evidence from Karachi stock exchange for non-financial listed firms. MPRA paper 37342
[12]
Ho, H., (2003), Dividend policies in Australia and Japan, "International advances in economic Research", Vol. 9, No. 2, Pp. 91-100.
[13]
John, F., & Muthusamy (2010), Leverage, growth and profitability as determinants of dividend payout ratio-evidence from Indian paper industry, "Asian Journal of business management studies". Vol. 1, No. 1, Pp: 26-30
[14]
Kun L. & Chung S., (2012), The impact of corporate governance on the relationship between investment opportunities and dividend policy: an endogenous switching model approach, "Asia-pacific journal of financial studies" Vol. 41, Pp.125–145
[15]
Komrattanapanya, P., & Suntrauk, P., (2013). Factors influencing dividend payout in Thailand: A tobit regression analysis, "International journal of accounting and financial reporting", Vol. 3, No. 2, DOI: 10.5296/ijafr.v3i2.4443s
[16]
Musa, & Fodio, I., (2009). The dividend policy of firms quoted on the Nigerian Stock Exchange: An empirical analysis, African Journal of Business Management Vol.3 (10), pp. 555-566, DOI: 10.5897/AJBM09.199
[17]
Najjar, B.A., (2009). Dividend behavior and smoothing new evidence from Jordanian panel data, "Studies in economics and finance". Vol. 26, No. 3, Pp. 182-197 DOI: 10.1108/10867370910974017
[18]
Nissim, D., & Ziv, A., (2001). Dividend changes and future profitability, "The journal of finance", No. 6
[19]
Nikolaos, E., (2005). The effect of distributed earnings and size of the firm to its dividend policy: Some Greek Data, “International Business & Economics Journal”, Vol. 4, No. 1
[20]
Miller, M. H., & Modigliani, F., (1961), Dividend policy, growth and valuation of shares, "Journal of business", Vol. 34, No. 4, Pp. 411-33
[21]
Perretti, G. F., Allen, M. T., & Weeks, H. S. (2013). Determinants of dividend policies for ADR firms, Shelton weeks, managerial finance, Vol. 39,No. 12, Pp. 1155-1168 DOI: 10.1108/mf-04-2013-0075
[22]
Salam, A., O., A. Masry and S. Elsegini, (2008). Board composition, ownership structure and dividend policies in an emerging market. Managerial Finance, Vol. 34, Pp.: 953-964.
[23]
Twaijry, A. A.A., (2007). Dividend policy and payout ratio: evidence from the kualalum pur
[24]
Stock exchange, "The journal of risk finance", Vol. 8. No. 4, pp. 349-363, DOI: 10.1108/15265940710777306
[25]
Yahyaee, K.H., Pham, T., & Walter, T., (2010),Dividend stability in a unique environment, Managerial finance, Vol. 36, No. 10, Pp. 903-916, DOI: 10.1108/03074351011070260
Browse journals by subject